Interim sealing of godowns may be lifted only on protective conditions when assessment is pending and revenue risk remains.

Where investigation and assessment are still pending, continued sealing of business godowns may be justified if prima facie material supports protective restraint, but unconditional release is not warranted. The Court balanced revenue protection against business continuity by permitting removal of the seals only on safeguards, including undertakings, additional postdated cheques, and maintenance of minimum stock. The operative principle is that interim restraint may be relaxed on terms designed to preserve the revenue's interest while avoiding unnecessary disruption to business operations.

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Issues: Whether the seals on the petitioner's godowns should be lifted pending completion of investigation and assessment, and if so, on what conditions.

Analysis: The investigation was still ongoing and final assessment had not been completed, so no conclusive findings were recorded on the merits of the alleged tax evasion. However, prima facie material existed with the department to justify continued restraint, and an unconditional lifting of seals was not warranted. At the same time, the Court noted that the department's estimate of liability was based on the maximum penalty rate and that the business stock could be preserved by imposing protective conditions. On that basis, the Court balanced the competing interests by allowing the seals to be removed subject to undertakings, additional postdated cheques, and maintenance of minimum stock.

Conclusion: The petitioner was granted conditional relief and the seals on the godowns were directed to be removed upon compliance with the specified conditions.

Ratio Decidendi: Where assessment is still pending and prima facie material justifies restraint, sealing or similar protective action may be relaxed by the Court only on terms that safeguard the revenue and preserve adequate stock.

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